Strategy Note /
Global

Back On The Road

  • My first marketing trip post Covid to Mexico, meeting with the largest Afores & family offices.

  • EM is cheap - taxi ride discount = 80%. Key Qs: June low THE low, pace of US inflation decline/EU energy price path

  • Growing conviction: Fed will validate, not eradicate the hi nominal growth world & EM best risk - reward in such world

Jay Pelosky
Jay Pelosky

TPW Founder & Global Strategist

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TPW Advisory
19 August 2022
Published byTPW Advisory

This week marked my first offshore marketing trip since pre Covid – it felt good to be back on the road, meeting new folks and getting the lay of the land in a place where I cut my EM teeth some decades ago.

 

Yes, Mexico City was the locale for a three day visit to many of Mexico’s largest Afores (pension funds), family offices and insurance companies. One couldn’t resist the old EM price check of the cab ride from the airport to the hotel – Mexico is very cheap with a 45 minute cab ride costing the equivalent of $15 vs $80 for my 45 minute cab ride out to JFK, a cool 80% discount.

 

As usual when walking through a presentation some 15 times over 3 days certain things jump out – things one was aware of but it’s always interesting how certain subjects graduate to the top of the list while others sink & how pushback leads to more or less confidence in one’s POV. I often gain a lot from engaging with other investors face to face – this trip only reaffirmed that perspective.

 

Here’s what Mexico’s largest investors wanted to know. The single biggest question was whether the June global equity low was THE low; my response was bottoms are a process but the high nominal growth world provides an earnings bridge as we saw in Q2 and will see through YE. In addition, technicals have become increasingly supportive while huge cash piles (largest since 2001) should not only provide fuel for further gains as time passes but also are likely to preclude new lows as investors put that money to work on pullbacks.